What are the benefits of Litigation Funding?

The benefits of litigation funding are numerous. Litigation funding transactions are typically non-recourse, meaning that if there is no recovery made from the dispute, then there is no obligation to repay the funder its advances or to pay any return on its investment. It is the non-recourse nature of these arrangements that provides ‘David’ claimants with access to justice against ’Goliath’ respondents. If these claimants had to bear the economic burden of enforcing their rights, they would simply not have their day in court against well-resourced respondents.

Moreover, when Goliath realises that David has a heavily capitalised funder supporting his cause, it often strengthens David’s bargaining power, and can change the tone and content of settlement discussions in the claimants’ favour dramatically.

However, litigation funding is no longer merely a lifeline for those claimants for whom funding is a financial necessity. Non-recourse funding to pay the costs of dispute resolution also benefits those claimants who have ample resources, but simply do not have the risk appetite, or cash flow, to invest in a long drawn out litigation or arbitration.

Another benefit of litigation funding is that it provides an additional assessment of the claims at no cost. A ’reality check’ at a developmental stage of the dispute can greatly enhance the strategy of the case. Funders like Woodsford, which have a staff of legal provide an extra layer of valuable diligence expertise.

Finally, for claimants that have yet to engage a law firm or may need to add local or specialised counsel, a well-established funder with a deep network of legal practitioners, such as Woodsford, can make introductions to a law firm best-suited to represent the claimant in the jurisdiction at issue.

Woodsford is a founder member of both the International Legal Finance Association and the Association of Litigation Funders.